Prime Minister Ariel Sharon, who cut short a visit to India, was to convene his security Cabinet later Thursday to decide on an Israeli response to the latest Hamas suicide bombings — two attacks that killed 15 Israelis on Tuesday.
Strategic decisions are on the agenda, including Arafat's expulsion and a reoccupation of the Gaza Strip, where Hamas leaders are based.
An editorial in the English-language daily Jerusalem Post said it is time for Israel to kill Arafat.
"We must kill as many of the Hamas and Islamic Jihad leaders as possible, as quickly possible, while minimizing collateral damage, but not letting that damage stop us," the paper said Thursday. "And we must kill Yasser Arafat, because the world leaves us no alternative."
It's a sign of the public mood in terror-scarred Israel, reports CBS News Correspondent Robert Berger. People are fed up with the man they blame for three years of suicide bombings and shootings.
However, many analysts believe killing Arafat would make matters worse. They say it would create a power vacuum and chaos, similar to the situation in Iraq.
Former Prime Minister Shimon Peres, head of the moderate opposition Labor Party, told a U.S. network that expelling Arafat would be a "historic mistake" that would "deepen the hostilities between the Palestinians and ourselves."
In the West Bank, the designated Palestinian prime minister, Ahmed Qureia, put together an eight-member emergency Cabinet. Qureia, widely known as Abu Ala, was to have presented the team to parliament for approval on Thursday. But the session was postponed until Sunday because several legislators were denied Israeli travel permits.
Israel cited bureaucratic reasons, saying requests for travel permits were not made early enough.
In a first response to the bombings, Israel stepped up its campaign against Hamas, dropping a half-ton bomb on the home of a senior Hamas official, Mahmoud Zahar, on Wednesday. Zahar survived, but his eldest son and a bodyguard were killed.
Hamas' military wing threatened to widen its bombing campaign and target Israeli homes and high-rise buildings. Israeli security forces were on high alert, particularly in Jerusalem, and police checkpoints caused massive traffic jams.
The Israeli military has started preparing for Arafat's possible expulsion from his West Bank headquarters and is waiting for a security Cabinet decision, a security official said on condition of anonymity.
Overnight, Israeli troops took over two buildings — the Palestinian Culture Ministry and an uninhabited structure — near Arafat's headquarters in the West Bank town of Ramallah as apparent lookouts, witnesses said.
"At this stage we are speaking of a message and a signal to the Palestinian Authority and Yasser Arafat," a military official told Israel Radio.
Israeli Foreign Minister Silvan Shalom said a majority in the 11-member security Cabinet favors expulsion, but that Sharon might not put the issue to a vote because the United States is not expected to approve such a far-reaching decision. Sharon has vetoed the idea in the past because of Washington's disapproval.
"We are in a situation in which (U.S.) approval for this, in case we asked for it, would be almost impossible to obtain," Shalom told Israel Army Radio. "I think there are some situations in which we have to make decisions ... that are completely cut off from outside influence."
Israeli Defense Minister Shaul Mofaz was quoted as saying that expelling Arafat was the least Israel should do, and that killing the Palestinian leader should be considered.
Qureia, tapped by Arafat over the weekend to replace Prime Minister Mahmoud Abbas initially wavered on whether to take the job, insisting he first get U.S. guarantees that Israel would meet its obligations in the U.S.-backed "road map" peace plan.
However, in the wake of Tuesday's Hamas bombings, Qureia was urged by U.S. officials to move quickly to form a Cabinet, Palestinian sources said. Qureia was given to understand that the Palestinians would be in a better position to forestall major Israeli reprisals if they quickly replaced Abbas, who resigned over the weekend after four months of wrangling over control of the security forces.
Qureia's Cabinet is expected to win quick approval once parliament meets. He would retain Nabil Shaath as foreign minister, Salam Fayad as finance minister and is expected to appoint Nasser Yousef, a veteran security chief, as interior minister.
President Bush urged Qureia to crack down on militants and said the United States has not abandoned the road map. "The road map is still there. The fundamental question is whether or not people, peaceful people, will be on the road," Mr. Bush told reporters at the White House.